STATE OF WISCONSIN
LABOR AND INDUSTRY REVIEW COMMISSION
P O BOX 8126, MADISON, WI 53708-8126 (608/266-9850)

WILLIAM R FITZGERALD, Employee

JIM PIONTEK TRUCKING INC, Employer

UNEMPLOYMENT INSURANCE DECISION
Hearing No. 10404069AP


An administrative law judge (ALJ) for the Division of Unemployment Insurance of the Department of Workforce Development issued a decision in this matter. A timely petition for review was filed.

The commission has considered the petition and the positions of the parties, and it has reviewed the evidence submitted to the ALJ. Based on its review, the commission agrees with the decision of the ALJ, and it adopts the findings and conclusion in that decision as its own, except that it makes the following modifications:

1. The sixth sentence of the first paragraph of the FINDINGS OF FACT and CONCLUSIONS OF LAW section on page 2 of the decision is modified to state:

He was required by the employer to undergo a road test.

2. The third sentence, and the word "Furthermore" in the fourth sentence, of the second full paragraph on page 3 of the decision are deleted.

3.  The sixth sentence of the second full paragraph on page 3 of the decision, beginning with the words "In making a determination...," is deleted.

4. The third sentence of the second full paragraph on page 6 of the decision is deleted.

5. In the last sentence of the second full paragraph on page 6 of the decision, the parenthesized letter "(c)" is deleted.

 

DECISION

The decision of the administrative law judge, as modified, is affirmed. Accordingly, the amounts earned by the claimant performing services for the putative employer during the relevant time period, totaling $142,176.00, constitute base period wages.

Dated and Mailed March 4, 2011

BY THE COMMISSION:

/s/ Robert Glaser, Chairperson

/s/ Ann L. Crump, Commissioner

MEMORANDUM OPINION


The claimant (Fitzgerald) performed services as a driver for the putative employer (Piontek), a trucking business, from 2006 through July 30, 2010.

Fitzgerald filed a claim for benefits on August 25, 2010. The base period for this claim consists of the last three calendar quarters of 2009 and the first quarter of 2010.

The issue is whether the amounts earned by Fitzgerald performing services for Piontek during this period constitute base period wages because these services were performed as a statutory employee.

Wisconsin Statutes § 108.02 states as follows, as relevant here:

108.02 Definitions. As used in this chapter:

(4) Base period. "Base period" means the period that is used to compute an employee's benefit rights under s. 108.06...

(4m) Base period wages. "Base period wages" means:

(a) All earnings for wage-earning service which are paid to an employee during his or her base period as a result of employment for an employer;...

(12) Employee.

(a) "Employee" means any individual who is or has been performing services for pay for an employing unit, whether or not the individual is paid directly by the employing unit, except as provided in par. (b), (bm), (c), (d), (dm) or (dn)....

(c) Paragraph (a) does not apply to an individual performing services for a government unit or nonprofit organization, or for any other employing unit in a capacity as a logger or trucker if the employing unit satisfies the department:

1. That such individual has been and will continue to be free from the employing unit's control or direction over the performance of his or her services both under his or her contract and in fact; and

2. That such services have been performed in an independently established trade, business or profession in which the individual is customarily engaged.

(e) This subsection shall be used in determining an employing unit's liability under the contribution provisions of this chapter, and shall likewise be used in determining the status of claimants under the benefit provisions of this chapter....

(14m) Employing unit. "Employing unit" means any person who employs one or more individuals.

(15) Employment.

(a) "Employment", subject to the other provisions of this subsection means any service, including service in interstate commerce, performed by an individual for pay....

(26) Wages. Unless the department otherwise specifies by rule:

(a) "Wages" means every form of remuneration payable, directly or indirectly, for a given period, or payable within a given period if this basis is permitted or prescribed by the department, by an employing unit to an individual for personal services....

Pursuant to Wis. Stat. § 108.02(4m), in order to be considered base period wages, earnings must be "paid to an employee during his or her base period as a result of employment for an employer..."

Since the record shows that Fitzgerald performed services for Piontek for pay during the relevant base period, Fitzgerald would qualify as a statutory employee unless one of the exceptions set forth in Wis. Stat. § 108.02(12)(a) applies.

One of these exceptions, which relates to "truckers," is set forth in Wis. Stat. § 108. 02(12)(c).

"Trucker" is defined by Wis. Stat. § 108.02(25e) as "a contract operator with a trucking carrier."

"Carrier" is defined in Wis. Admin. Code § DWD 100.02(8) as:

(8) "Carrier" means a person engaged in the hauling of passengers or freight by motor vehicle and includes a person engaged as a "common motor carrier," under s. 194.01 (1), Stats., as a "contract motor carrier," under s. 194.01 (2), Stats., or as a "private motor carrier," under s. 194.01 (11), Stats.

As the record shows, Piontek qualifies as a motor carrier within the meaning of Wis. Stat. § 194.01. Consequently, Piontek would qualify as a carrier within the meaning of Wis. Adm. Code § DWD 100.02 (8).

The term "contract operator" is defined in Wis. Admin. Code § DWD 100.02(12) as "an individual who contracts to lease a motor vehicle to a carrier for use in the carrier's business."

The record shows that Fitzgerald owned a tractor and trailer, and he leased these vehicles to Piontek to perform the driving services at issue. Consequently, Fitzgerald would qualify as a contract operator within the meaning of Wis. Adm. Code § DWD 100.02(12).

Since Piontek qualifies as a carrier, and Fitzgerald as a contract operator, Fitzgerald satisfies the statutory definition of "trucker."

The next step then is to determine whether, within the meaning of Wis. Stat. § 108.02(12)(c), Fitzgerald performed his driving services free from Piontek's direction and control, and performed these services in an independently established trade, business or profession in which he was customarily engaged.

This determination is governed by Wis. Adm. Code § § DWD 105.03 [direction and control], and DWD 105.04 [independently established business].

Wisconsin Administrative Code § DWD 105.03 provides as follows:

DWD 105.03 Contract operators; direction and control.

(1) The department shall examine the factors enumerated in this section to determine, both under contract and in fact, whether the contract operator is free from a carrier's direction or control, while the contract operator performs services for the carrier. The department shall determine whether:

(a) The contract operator owns the motor vehicle or holds the vehicle under a bona fide lease arrangement with any person other than the carrier;

(b) The contract operator is responsible for the maintenance of the motor vehicle;

(c) The contract operator bears the principal burden of the motor vehicle operating costs including such items as fuel, repairs, supplies, insurance and personal expenses while on the road;

(d) The contract operator supplies, or is responsible for supplying, the necessary personal services to operate the motor vehicle;

(e) The contract operator determines the details and means of performance, namely, the type of equipment, assignment of driver, loading, routes and number of stops to be made during the haul, as well as starting, completion and elapsed times;

(f) The contract operator may refuse to make a haul when requested by the carrier;

(g) The contract operator may terminate the lease at any time after reasonable notice; and

(h) The contract operator is compensated on a division of the gross revenue or by a fee based upon the distance of the haul, the weight of the goods, the number of deliveries, or any combination of these factors.

(2) If the department determines that all of the factors under sub. (1) (a) to (h) are present in the relationship between the contract operator and the carrier, the contract operator shall be deemed to be free from the carrier's direction and control in the performance of services under s. 108.02 (12) (b) 1., Stats. If one or more of the factors under sub. (1) (a) to (h) are not present in the relationship between the contract operator and the carrier, the department shall consider additional factors of the relationship, both under contract and in fact, including whether:

(a) The contract operator may negotiate with the carrier to determine the method, frequency and regularity of payments made to the contract operator;

(b) The contract operator has the authority to discharge any driver whom he or she employs;

(c) The carrier requires decals, lettering, signs, emblems or other markings on the contract operator's motor vehicle for the purpose of advertising the carrier's name or business;

(d) The carrier requires the contract operator to submit reports;

(e) The carrier requires the contract operator to obey any work rules or policies; and

(f) The carrier requires any deductions from payments owing to the contract operator for federal or state income taxes or taxes under the federal insurance contributions act.

(3) If the contract operator is found to be under the carrier's direction or control under subs. (1) and (2), the contract operator shall be deemed to be an employe of the carrier under s. 108.02 (12) (b) 1., Stats.

The record shows that Fitzgerald owned the motor vehicle he used to perform the subject driving services (105.03(1)(a)); was responsible for the maintenance of the vehicle (105.03(1)(b)); bore the principal burden of the vehicle operating costs (105.03(1)(c)); supplied or was responsible for supplying the personnel services to operate the vehicle (105.03(1)(d)); could refuse to make a haul (105.03(1)(f)); could terminate his lease agreement with Piontek after reasonable notice (105.03(1)(g)); and was compensated on a division of gross revenues (105.0391)(h)).

The remaining requirement is set forth in Wis. Adm. Code § 105.03(1)(e), i.e., that the contract operator determine the details and means of performance. The record shows that Fitzgerald determined the type of equipment, assignment of driver, and loading.

The question is whether he also determined the routes and number of stops to be made during the haul, as well as starting, completion, and elapsed times.

Since the Court of Appeals decision in DWD v. LIRC and Dunham Express Corp., 2010 WI App 123 (Ct. App. 2010), the manner in which 105.03(1)(e) is to be applied to long-haul trucking is not entirely clear. In Dunham, the carrier's clients specified the times/locations at which packages were to be dropped off or picked up, and the carrier organized these into groupings based primarily upon geographical considerations. These groupings of pick-ups/drop-offs were awarded after competitive bid to contract operators. The Court of Appeals held that these pick-ups/drop-offs were "stops," and these groupings were "routes" within the meaning of 105.03(1)(e).

Here, Fitzgerald, like all long-haul truckers, was provided a list of remote drop-off/pick-up locations and scheduled drop-off/pick-up times, and he planned the best routes to arrive at these locations and when he would stop for meals/rest. The approach most consistent with the Dunham decision is that the development of the drop-off/pick-up times and locations by Piontek removes from Fitzgerald the discretion to "determine...the routes and number of stops to be made during the haul," within the meaning of 105.03(1)(e). As a result, this factor is not satisfied.

Since not all of the factors set forth in Wis. Adm. Code § 105.03(1) are satisfied here, the factors set forth in Wis. Adm. Code § 105.03(2) are required to be considered.

The record shows that Fitzgerald has the authority to discharge any driver he may employ (105.03(2)(b)); the only markings on the vehicle are those mandated by state and federal trucking requirements (105.03(2)(c))(1); the only reports are those required by federal trucking requirements, i.e., logs and trip reports, or to verify for Fitzgerald and its customers through a bill of lading that a delivery was completed (105.03(2)(d)); and no deductions are made from Fitzgerald's compensation for federal or state income taxes or FICA contributions (105.03(2)(f)).

The record shows that Piontek dictated the method, frequency, and regularity of payments to Fitzgerald, so Wis. Adm. Code § DWD 105.03(2)(a) is not met.

The ALJ found that Piontek required Fitzgerald to obey its work rules and policies within the meaning of 105.03(2)(e), and the commission agrees. Fitzgerald testified that, although he did not receive training or orientation at Piontek, his agreement with Piontek contained rules about making deliveries and pickups and how to conduct himself. Piontek did not specifically address this other than to indicate that Fitzgerald completed an orientation conducted by the company before he began performing services for Piontek. In the "worker status questionnaires the parties completed (exhibits #1 and #3), each indicated that Fitzgerald was required by Piontek to obey work rules or policies. This is sufficient to establish that Piontek exercised direction and control over Fitzgerald in this regard.

In summary, Fitzgerald does not satisfy part of Wis. Adm. Code § DWD 105.03(1)(e), or Wis. Adm. Code § § DWD 105.03(2)(a) and (e). This is sufficient to establish that Fitzgerald was subject to Piontek's direction and control, particularly given the decision in Dunham, where the Court of Appeals held that there was direction and control by a carrier when, as here, part of 105.03(1)(e) as well as two elements of 105.03(2), i.e., (2)(c) and (2)(e), were present.



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uploaded 2011/06/03


Footnotes:

(1)( Back ) Wisconsin Administrative Code DWD 105.02, provides that:

DWD 105.02 Requirements of shipper or law; department policy. In determining whether the carrier exercises direction or control and whether the contract operator is engaged in an independently established business, the department may not use as evidence any factor to the extent that it is specified by the shipper or required by state or federal laws or regulations. The department believes it is unreasonable to consider mandates of law or specifications of shippers as evidence because they have not been imposed on the relationship between the contract operator and the carrier by those parties of their own volition.